IRVING, TX -- CEC Entertainment Inc., parent of the Chuck E. Cheese's children's entertainment arcade and pizza chain, said fourth-quarter profits for the period ended Jan. 2 were down 48% from the same period a year ago. An unfavorable tax issue was a key reason for the drop, the company said.
Entertainment sales fell 2% while food and beverage sales dropped nearly twice as much, 3.5%. Quarterly profits stood at $2.8 million, down from last year's $5.4 million.
Full-year profits for fiscal 2010 were $54 million, down from 2009's profits of $61.2 million. Total revenues for fiscal year 2010 decreased $1.1 million to $817.2 million compared with total revenues of $818.3 million in fiscal 2009.
However, sales at comparable stores for the fourth quarter rose more than expected by 3.9%. Comparable sales for fiscal 2010 increased 1.5% over 2009 using the same calendar year.
Officials attributed the increase to store remodeling and expansions, as well as more birthday parties, online coupon sales and TV advertising. CEC also cited a boost in weekday sales mainly driven by nonprofit fundraisers for schools and charities.
CEC said it would open three new U.S. locations this year and relocate three. The company said it will also launch an improved pizza product this summer.